THE annual publication of the Government Expenditure and Revenue Scotland (GERS) report always prompts frenzied discussions over the state of Scotland’s finances and whether the country should be independent.

Today’s figures will be especially politically significant as they will be the ones used in a possible new independence referendum campaign if a new vote is held next year.

The headline number that politicians and journalists seize on is the size of the public deficit – the amount by which spending exceeds revenue collected through taxes. Last year’s GERS report revealed a deficit of 7.9% for 2017/18, an improvement on 8.9% for 2016/17.

READ MORE: GERS: Scotland's public spending deficit down by more than £1bn

For the pro-Union parties the deficit is proof Scotland “is too wee and too poor” to be independent.

But what this ignores is that it’s perfectly normal for countries to run a small budget deficit. Out of the 28 EU nations in 2018, half of them spent more than they raised in taxes.

The Scottish Government also points out that the GERS figures do not reflect the strength of the economy but report only on public-sector revenue and expenditure.

READ MORE: ‘Rattled’ pro-UK parties attack Sturgeon for missing GERS figures

Last year’s report stated: “Although these may be affected by economic performance, GERS does not directly report on Scotland’s wider economy.

“If users are interested in the measurement of the economy as a whole, they should examine other economic statistics products, such as the quarterly gross domestic product figures or Quarterly National Accounts Scotland. These publications provide estimates of real-terms growth in the economy, and GDP in cash or nominal terms and its components.”

According to the Office for National Statistics, Scotland is in the top 25 global economies in terms of income per capita and has at least 34% of the UK’s total natural wealth, including wind, water, timber, oil and gas.

A further problem with GERS is that they are an estimate of Scotland’s public finances as they assign to the country a share of some expenditure which takes place outside Scotland.

On this issue, last year’s report explained: “For example, expenditure on embassies occurs outside Scotland, but provides benefits to Scottish residents and companies, such as Scottish tourists requiring consular services. As such, Scotland is allocated a population share of this expenditure in GERS.

“Likewise, spending on museums in Scotland benefits visitors from the rest of the UK, so not all of this spending is assigned to Scotland in GERS.”

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However, the biggest point made about the figures from the pro-independence standpoint is that they do not reflect what the economy of an independent Scotland would be like and that the deficit is a symptom of the damaging effects of the Union and demonstrate how UK economic activity is concentrated around and balanced in favour of London and the south-east of England.

“What is undoubtedly true is that the current position of the country’s public finances is an imperative for change rather than staying the same,” said the SNP’s Growth Commission report, published last year, which took GERS as a starting point to set out the economic case for independence. “It is a reflection of the policies and structures that have created the scale of the estimated deficit as it stands, rather than those that would seek to put it right.”

The commission underlined that the figures assign a share of UK spending to Scotland on policies which an independent Scotland would not pursue, such as the renewal of the nuclear weapons system Trident. Scotland would also spend less on the UK’s grand network of foreign embassies, the Growth Commission added.

Additional powers that come with independence allowing Scotland’s economy to grow are also not taken account of in GERS.

While the Scottish Government has recently gained responsibility for limited tax and welfare powers, it lacks the real levers – such as powers over immigration – that will enable it to take full economic control, increase revenue from an expanded income tax base and help the nation prosper, matching the performance of other small nations around the world.